Destroying Your Debt

Debt is a problem that many Americans face on a daily basis.  Leading bankruptcy attorney Robert J. Semrad believes that debt should not interfere with your daily life. He has five essential tools you need in order to live debt free.

-          Saving and Investing 101: From how much you should put away, to where you should put it, Robert Semrad has the insight and tools you need for saving money
o        Where should you invest in the short-term? Savings accounts, certificates of deposit and money market funds.
o        Where should you invest for retirement? 401k’s and individual retirement account (IRA’s)
o        Where should you invest for the long term? Stocks (choose companies you are familiar with and plan to hold the stock for the long-term) and mutual funds
-          Stop Foreclosure Now: Semrad can tell you when and how to file for a Chapter 13. He can also tell you offer tips for avoiding “foreclosure rescue” schemes.
o        Don’t Fall for so-called foreclosure schemes
o        Don’t think that negotiating with your lender will stop the foreclosure process: just because you have come to some sort of an agreement does not mean that the lender isn’t moving forward with the foreclosure process
o        Don’t “walk away” from your home with consulting an attorney: never let go of a home before consulting with a legal professional. Why? Because if you walk away the bank eventually writes off a portion of your mortgage and the IRS treats the portion written off as income paid to you.
o        Don’t fear bankruptcy: Chapter 13 can be one of the only surefire ways that you will be able to keep your home.
-          Earn More and Spend Less: Budgeting can be an integral part of your financial picture. We have some simple and easy tips for cutting corners that can save you some big bucks. Some tips that can save you money are:
o        Rent movies from the library instead of Blockbuster or Netflix (it’s free!) (annual savings $2,500)
o        Get rid of your land line if you have a cell phone, there is only a need for one line (annual savings: $500)
o        Go generic: buying generic brands instead of name brand can save you around $500 a year
o        Bottle Your own water: don’t buy bottled water, fill a thermos to glass instead of buying a bottle (annual savings: $350)
o        Drink the boss’s coffee, stop buying from Starbucks and other coffee chains (annual savings $750)
-          Building a Budget: Knowing what your true expenses are is the first key to financial freedom. Developing some sort of budget is essential when climbing your way out of debt.
o        Sort out all of your expenses. Realize what are the necessary costs and discretionary costs, this is the first step to realizing how much money you spend on what.
o        Prioritize you goals. You need to realize what expenses and goals are more important than others, and take the necessary steps in order to achieve those goals you’ve set for yourself and your family.
-          To File Or Not To File?:  Filing for bankruptcy doesn’t have to be as scary as it sounds. Most people are concerned with the negative connotation associated with the word, instead of focusing on what bankruptcy can actually solve. Semrad can dispel the difference between bankruptcy filings as well as explain why filing isn’t such a bad thing.
Know the difference between a Chapter 7 and a Chapter 13 filing.
o        Chapter 7, most personal property is exempted (you get to keep it), almost all debts are wiped out in one clean action. This type of filing works best for people who don’t have important assets they need to protect, like a home.
o        Chapter 13, if you are having trouble making mortgage payments, chapter 13 is the best solution. A Chapter 13 creates a court-supervised repayment plan lasting 3 to 5 years; it stops for foreclosure process immediately. Your unsecured debt can also be repaid at a greatly reduced rate.
o        If you’ve been in debt for longer than a year, it is time to consult a bankruptcy attorney.
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